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Industry Update

Nov 07, 2019

Mutual fund distributors who want to undertake Aadhaar authentication services through KUAs (KYC User Agency) should enter into an agreement with the KUA. They should also get themselves registered with UIDAI as sub-KUAs.

The Securities and Exchange Board of India has issued a circular regarding the process to be followed for Aadhaar based electronic KYC exercise for domestic investors. According to the circular, direct investors can simply go to the AMC’s website and use Aadhaar to do the e-kyc process. However, mutual fund distributors who want to undertake Aadhaar authentication services through KUAs (KYC User Agency) should enter into an agreement with the KUA. They should also get themselves registered with UIDAI as sub-KUAs.

“This is definitely going to make life easier for a lot of retail investors, especially young investors. Many young, new investors are wary of the offline paperwork and are comfortable with digital kyc processes,” says Vishal Dhawan, Founder, Plan Ahead Wealth Advisors, a Mumbai-based wealth management firm.

Sebi cited the circular by the Department of Revenue, Ministry of Finance, issued on 9 May on procedure for processing of applications under section 11A of the Prevention of Money Laundering Act, 2002(“PMLA”), for use of Aadhaar authentication services by entities other than the banking companies. The use of Aadhaar-based KYC had stopped after the Supreme Court, in its judgement in September,2018, struck down Section 57 of the Aadhaar Act as unconstitutional. As a result of the judgement, no company or private entity can seek Aadhaar identification from clients or investors.

Mutual fund advisors say the re-introduction of Addhar based digital verification would draw many young investors to mutual funds. Advisors say many young investors change their decisions to invest in mutual funds when they face some trouble with offline procedures. "We have seen people in their 20s decide against investing in the one week that their application takes to get processed. The ‘inconvenience' of filling forms, taking out time, paperwork is a hindrance for them,” says Vishal Dhawan. 

However, there are many investors who are still not ready to move to the online mode because they are sceptial about the security online. For them central-kyc and physical verification is a better way of doing things. Mutual fund advisors also say that senior citizens, retired investors, investors who are not tech savvy still prefer the offline mode more than the online kyc. “There are investors who don’t even use net banking. They are not comfortable giving away their Aadhaar details etc to anyone. For them copies attested saying- for KYC purpose is their safety measure against data leaks and theft. So, this decision is not important to them,” says Rituparna Das, head of operations, Dilzer Consultants.

Sebi has given clear instructions on how retail investors and distributors can approach the new e-kyc. Here are the points that you should know.

  1. If you are investing in a mutual fund scheme directly through the website of the mutual fund house, you can just go to the website, put in your Aadhaar number and complete your KYC by putting in some details and the OTP that comes on your registered mobile number. Sebi has directed the AMCs to not store the Aadhaar number in the databases of the company.
  2. If you are investing via a mutual fund platform, it needs to be either a KUA (KYC Using Agency) or the SEBI registered intermediary which is also a Sub-KUA for you to use the eKYC facility.
  3. If you are investing via a mutual fund distributor or appointed person for e-KYC through Aadhaar. The Sebi-registered distributors will perform e-KYC using registered devices with KUAs. Investor will enter Aadhaar number and biometric and provides consent on the registered device

Source: EconomicTimes

Nov 01, 2019

The forensic audit conducted by KPMG has revealed alleged routing of at least Rs 20,000 crore by DHFL to several shell companies. But it did not specifically look into any links with Mirchi and Dawood.

MUMBAI: Lenders to Dewan Housing Finance (DHFL NSE 4.87 % ) are set to expand the purview of a forensic audit to include its business dealings with companies allegedly linked to gangsters Iqbal Mirchi and Dawood Ibrahim Kaskar, two people familiar with the matter said.

The forensic audit conducted by KPMG has revealed alleged routing of at least Rs 20,000 crore by DHFL to several shell companies. But it did not specifically look into any links with Mirchi and Dawood. “Now that allegations of DHFL’s links to the underworld have surfaced, there is no other alternative but to investigate these transactions and widen the scope of the forensic audit,” said an official involved in the discussions.

DHFL and State Bank of India, which has the largest exposure to the mortgage lender, did not respond to ET emails seeking comment until press time Wednesday. KPMG declined to comment. The Enforcement Directorate is probing DHFL’s alleged links with Sunblink Real Estate, through which money was allegedly laundered and routed to Dubai at the behest of Mirchi.

DHFL chairman Kapil Wadhawan and his brother Dheeraj were recently questioned by the ED over Rs 2,186 crore loans given by the mortgage lender to the realty firm. ET had earlier reported that while the ED had not named DHFL as the NBFC in question, Sunblink’s accounts for 2010 indicated that it had received ?22 crore as loans from the Mumbai-based firm during the year.

The latest round of allegations against DHFL may also put the resolution plan for the company under jeopardy and lead to the account becoming a non-performing asset, as bankers are a worried lot and don’t want to sign on the dotted line as the company is under a multi-agency probe.

“Every day brings with it fresh rounds of accusations which are levelled against DHFL promoters. How can bankers take a material decision on restructuring the loan when there are issues related to alleged siphoning funds by promoters?” asked an official. A draft KPMG forensic audit report had showed DHFL disbursed loans and advances to inter-connected entities that appeared to be linked to its promoters.

It also claimed that about 25 group companies to which DHFL had lent a total of Rs 14,000 crore had an average profit of about Rs 1 lakh, raising doubts that the management might have siphoned off funds. Union Bank of India appointed KPMG to carry out a special review of DHFL for April 2015 to March 2019. The company had total loans and advances of Rs 97,977 crore at Marchend. Financial lenders are working on a resolution plan submitted by DHFL that involves converting debt into equity. While banks and NBFCs have signed the proposed resolution, some mutual funds have stayed away.

Also:EconomicTimes

Oct 28, 2019

The Telecom Regulatory Authority of India (Trai) has introduced a lot of new and revamped rules in sectors like DTH, broadcasting, and telecom. It is notable that in the last few months, Trai has made a considerable amount of alterations to make life easier for cable and DTH subscribers and service providers both.

In the latest announcement, Trai has proposed some new guidelines related to Set-Top-Boxes for DTH and cable TV operators and service providers.

According to the new recommendations DTH service provides have to conduct the Know-Your-Customer (KYC) process for the subscribers. The organisation has made it mandate for everyone. DTH subscribers from Airtel Digital TV, Dish TV, Tata Sky, D2h and Sun Direct will be eected from the new recommendation.

According to Telecom Talk report, last year the Ministry of Information and Broadcasting (MIB) have written a reference letter to Trai recommending the addition of KYC for Set-Top-Boxes. The KYC process will allow operators to verify the customers before installation.

To complete the suggestion procedure, Trai circulated a consultation paper in the public domain to note remarks and counter remarks. After this Trai has also conducted an open house discussion on the topic after which the decision for making KYC of Set-Top Boxes was made.

According to the report, all the DTH operators have to conduct the verication before the installation of new DTH at the subscriber's house. The address which is provided on the application form for DTH services has to be veried.

A company representative will be the authorised person to do the verication. To verify the customer, Trai has also recommended the use of OTP or by a valid identity card. The DTH representative will be able to start the setup process only after the successful verication.

So this is the new regulation which is going to be implemented soon and all the DTH service provides has to follow this.

Source: Gizbot

The Ministry of Human Resource Development (HRD) on Thursday took cognisance of the media reports into the allegations regarding the sale of fake degrees by certain universities.

The Ministry of Human Resource Development (HRD) on Thursday took cognisance of the media reports into the allegations regarding the sale of fake degrees by certain universities.

It directed the University Grants Commission (UGC) to immediately constitute a high-level committee to inquire into the allegations. “In response to media reports, the Human Resource Development Ministry has ordered UGC to immediately constitute a high-level committee to enquire into the allegations regarding the sale of fake degrees by certain universities,” the ministry said in a statement.

The committee has been tasked to complete its enquiry within three weeks. “The committee is required to complete its enquiry within three weeks and identify institutions and individuals that have resorted to such illegal practices so that strict action can be taken against all concerned,” it said.

Union HRD Minister Ramesh Pokhriyal Nishank said that he has instructed the concerned institutions to conduct a strict investigation into the matter. “Whoever is guilty, strict action will be taken against them,” he wrote on Twitter.

In an investigation, News18 revealed that it met some agents from an educational consultancy who claimed they would provide educational degrees without the need to attend classes or appear for examinations.

An agent from Navi Mumbai’s Koparkhairane-based consultancy said that he can provide degrees from two well-known universities and claimed to conclude the entire process within 45 days.

The universities – Yashwantrao Chavan University and Solapur University – both of which are approved by the UGC and the All India Council for Technical Education (AICTE).

The agent handed over the backdated degrees and assured that the entry of these forged documents would be done in the university’s records.

The investigation further showed that the charges for obtaining engineering, LLB and Ph.D vary from one university to another.

The amount charged for an engineering degree was Rs 75,000 for a course of three years, while a law degree from a university in Uttar Pradesh can be bought for Rs 2 lakh.

Source: FinancialExpress

Aug 30, 2019

JAIPUR: The ministry of human resource development (MHRD) launched an inquiry against six universities, including the Sunrise University of Alwar , for alleged ‘sale’ of fake degrees on Thursday.

The ministry constituted a high-powered committee after allegations of selling fake degrees surfaced earlier in the day. In a sting operation, officials of these universities had promised to provided degrees to students without attending classes and writing examinations.

The high-powered committee pulled up the higher education official in Rajasthan over the phone for not regulating private universities. Sensing the seriousness of the matter, MHRD minister Ramesh Pokhriyal tweeted, “I have directed related agencies to carry out a thorough probe.”

These universities include three private ones, Sunrise University in Alwar, Kalinga University in Chattisgarh and Himalayan University in Arunachal Pradesh, and three state varsities—Yashwantrao Chavan Maharashtra Open University in Maharastra, Solapur University and Andhra University in Vishakapatnam.

The probe committee members include Dev Swarup, additional secretary of UGC; Yogesh Singh, VC of Delhi Technological University; A C Pandey, director of inter-university accelerator centre, New Delhi; D P Verma, additional director, National Judicial Academy of India, Bhopal; K P S Unny, former professor and registrar, Jawaharlal Nehru University.

“The committee will probe allegations against these universities with full fairness and will complete the probe within the stipulated period of time,” Dev Swarup told TOI. Though TOI called and messaged T K Agarwal, owner of the Sunrise University, he didn't respond.

The state higher education minister, Bhanwar Singh Bhati, was also unavailable for comments.

The probe committee held its first meeting on Thursday evening in New Delhi. “The concerned officials of universities and respective state government higher education officials, including those from the Rajasthan government, were called and asked to thoroughly investigate the matter.

They were also asked to file criminal cases against these varsities,” said an MHRD source.

The ministry had already put private universities of Rajasthan under the scanner for registering a whopping 70% growth in PhD registrations in 2017.

The state has 55 private universities, the highest in the country.

The state had carried an inquiry against four private universities and found they had violated UGC norms at every level.

But no severe action was taken, leaving the fates of hundreds of students in limbo.

Source: imesofIndia

 

An agent approached by an undercover team agreed to provide fake educational certificates from universities recognised by both the UGC and the AICTE.

He said the entire process would take 45 days Mumbai: An exclusive investigation carried out by News18 has uncovered the dark side of education institutions where degrees are on sale.

A team of undercover reporters approached some agents who claimed they would provide us educational degrees without attending classes or appearing for examinations.

The team met Swapnil Gaikwad, who claimed to be an agent of Key Education Consultancy in Navi Mumbai’s Koparkhairane. He agreed to get us a Bachelor of Arts (BA) degree backdated to 2016. Gaikwad told us that he can provide degrees from two well-known universities – these include Yashwantrao Chavan University and Solapur University, both of which are approved by the University Grants Commission (UGC) and the All India Council for Technical Education (AICTE). Gaikwad said the entire process would take 45 days.

Scanned copies of the educational degrees would be showed to us in 30 days and the hard copies handed over within the next 10-15 days. What is even more shocking is that the candidate is not required to attend classes or visit the university — everything is already done since it is backdated, said Gaikwad.

The main thing is to add these forged documents to the university’s records, he added. When we raised doubts about the authenticity of the degree, Gaikwad tried to convince us by saying, "It's an original certificate, along with the records. It's available for verification." We were also offered degrees in engineering, LLB and Ph.D from different universities — the charges for them vary.

The amount charged for an engineering degree was Rs 75,000 for a course of three years. We had to pay half the amount as advance and the rest upon receiving the scanned and hard copies.

The Ph.D degree offered was from the Andhra University — we were told that the thesis and synopsis will also be provided. Gaikwad told that he could get us a law degree for Rs 2 lakh from a University in Uttar Pradesh. According to a whistleblower, an increase in the number of universities is the major reason that has led to the expansion of the degree market. "Every university has a target.

Some universities are doing well, some are average performing, and some are doing badly. To fulfil the target of universities doing badly, these centres have been established.

These centres play as the marketing partners of the university and sell the certificates. It’s a win-win situation for both -- the candidate gets certificate and the university gets admissions," said the whistleblower.

The Ministry of Human Resource Development (HRD) on Thursday took cognisance of the investigationand directed the UGC to immediately constitute a high-level committee to inquire into the allegations. "The committee is required to complete its inquiry within three weeks and identify institutions and individuals that have resorted to such illegal practices so that strict action can be taken against all concerned," it further said.

Union HRD Minister Ramesh Pokhriyal said he has instructed the concerned institutions to conduct strict investigation. "Whoever is guilty, strict action will be taken against them," he wrote on Twitter.

Source: News18

Aug 29, 2019

The Delhi government has ordered an inquiry into Shahdara DM issuing fake certificates to 400-odd people to help them bag jobs in the civil defence department.

A district magistrate in Delhi faces an inquiry after he allegedly issued fake certificates to over 400 people from another state to help them secure positions in the civil defence department.

The accused, identified as Shahdara DM Kuldeep Pakad, allegedly issued certificates to 400 people, mostly from his home state, certifying them as Delhi residents.

Confirming the case, Delhi transport minister Kailash Gahlot said an inquiry has been ordered. The committee has been asked to submit a report in the case within two days, he added.

"The allegations against the officer are serious in nature. An inquiry has been instituted and the report is likely to be submitted in a day or two. Based on the findings, action will be taken against the officer," the transport minister told India Today.

The transport minister said the process of hiring civil defence volunteers (CDVs) as bus marshals has been put on hold in Shahdara district till the inquiry is complete.

"We have enough time as new buses will be added to the fleet in a phased manner," he said. What is the case The transport department of the Delhi government recently asked DMs of all districts to provide CDVs to be hired as marshals in DTC buses.

With a vacancy of 10,000 marshals, the transport department was looking for CDVs from all districts. Shahdara district magistrate Kuldeep Pakad allegedly issued fake certificates to approximately 400 people from his home state.

In these certificates, Kuldeep stated that they were residents of Delhi.

Source: IndiaToday

Sep 17, 2019

In a world where instances of identity theft are increasing day by day, identity verification is one of the most reliable ways to build trust between any two parties. In simple terms, Identity Verification means a process that can prove or verify that someone does exist.

Fact is, in today's world, it is no longer safe to blindly trust someone’s words. According to a survey conducted by Forbes, over 17 million people are impacted by identity theft every single year, especially consumers who are more than 50 years old are more vulnerable to such crimes. Even in India, there have been many instances of frauds conducted using Aadhaar. Just earlier this year, there were five cases of Aadhaar-related frauds where money worth lakhs was fraudulently taken out from customers’ accounts in two public sector banks.

Moreover, Andhra Bank has had four similar cases where a whopping amount of Rs. 4, 20,098 was taken out from certain customers’ bank accounts without their knowledge using their Aadhaar details. In fact, since 2015, the Indian banking department has received over twenty complaints regarding Aadhaar-related frauds. With so many instances of identity thefts, the only reasonable measure to build trust is to adopt identity checks.

Identity verification – A long-term solution

In India, identity verification is slowly, but surely becoming integrated in the way our economy runs. It is safe to say that in a few years, they will be fully integrated into the way we live our very lives. Today, we need to verify our identity by providing our national IDs before we apply for jobs; we need to complete our KYC in order to use every day apps like mobile wallets. Requirements like these show the pressing need for identity verification in the world today.

The rising popularity of national identity verification also means that biometrics too are gradually becoming the norm in identity checks. Soon, it is a possibility that elements like retina scan and other neurological processes may become the normal parameters for identity verification. They provide a more secure and solid fence when it comes to identity thefts.

However, your biometrics are not readily available to others, unlike your personal details. Given their security, reliability as well as scalability (they are already in use to a certain extent), they appear to lead a hopeful and more secure future for identity verification. After all, it is next to impossible for someone to steal your fingerprints, iris and retina patterns, hand geometry, voice waves and so on.

APIs – The basis of identity verification

Today, identity checks are done based on the government’s database, facilitated by the use of advanced APIs (application programming interface), as well as complex and intelligent search algorithms. API, which stands for Application Programming Interface, is a software intermediary which enables two different applications to interact and communicate with each other. It is the main technology behind all kinds of national identity verification today.

Here’s how it works. When a background screening company conducts an identity search, it is basically sending out a request to the government’s database for access so that whatever is needed like identity, age, address and more can be verified. API is the middleman that sends this request for access and sends back the response, that is, the verification result to the company. This process aids in conducting instant identity verification.

Today, API is the building block of national ID checks, enabling verification of personal details and information about an individual. But with the rise in biometrics, this may not be the norm of identity verification very soon.

Also:Identity verification for the economy running on‘trust’

Mar 18, 2019

A fake degree racket was busted by police on Sunday. One person was arrested while his two accomplices managed to flee. Preparing fake degrees and certificates for those seeking government jobs and admissions in schools and colleges, the gang made tall claims of completing their work in five minutes.

According to police, three persons were running the racket from a rented house at Ashok Nagar under Subhashnagar police station. An FIR has been lodged and the arrested accused was sent to prison.

Superintendent of police (SP), city, Abhinandan Singh, said, “The three accused were identified as Amit (27), a resident of Veerpur Makruka village under Bhojipura police station; Ravindra Pratap Singh (29), a native of Ganeshnagar under Shubhashnagar police station; and Baburam Gangwar (32) of Madinath under Shubhashnagar police station.

A five-member police team raided the location. On seeing us, Amit raised the alarm and they started fleeing the area. This is when we nabbed Amit.” Singh added, “After interrogating Amit, we came to know that the gang was involved in preparing fake school and college degrees.

Birth and death certificates at high prices were part of their work. An FIR has been lodged against the trio under section 420 (cheating) and various other sections of forgery and cheating.” The police also recovered nine stamps, a coloured printer, a keyboard, a laptop, four fake TCs and a death certificate from the location.

Source: TimesofIndia